Lou Dobbs Fights With Time Warner for Cyberturf

Lou Dobbs, president and anchor of the cable business news channel CNN-FN, appears to have won the first of what promises to be many turf battles in Time Warner Inc.’s attempts to conquer cyberspace and make it pay.

Back in January, the powers that be at Time Warner decided it was time for another one of those corporate restructuring sessions that big companies do when they can’t figure out how to fix something. So, Time Inc. executive Michael Pepe was made president of a new fiefdom, an umbrella group dubbed Time Warner E-Commerce, which is supposed to encompass all of the company’s on-line activities. Through the magic of synergy, Mr. Pepe’s mission was to somehow make profitable a division that Time Inc. chairman Don Logan once described as “a black hole.”

Mr. Pepe’s big idea was to take the money-losing Time Inc. magazine-themed Web sites (such as People.com, Fortune.com, Money.com, etc.) and match them with corporate television and entertainment divisions to make “hubs” that people would go to: entertainment, news, business news, sports and life styles. First on the roster seemed to be business news. (Mr. Pepe used to run the financial magazine group that oversees Fortune , Money and Your Company .) Mr. Pepe wanted to combine the three magazines Web sites with CNNfn.com, thus diluting Mr. Dobbs’ control over the site.

As Time Inc. New Media sources understood the plan, they’d be in charge of the new business hub. But when Mr. Dobbs got wind of what was in the works, he apparently decided he was the master of the personal finance domain. And he quickly made his feelings known. On March 30, The Wall Street Journal ran a piece raising the possibility that Time Warner’s on-line properties might go public. The Journal article had Mr. Dobbs confirming the imminent expansion of CNNfn.com and talking about the company developing what The Journal called “content-rich vertical portals,” as well as anonymous “executives” from Time Warner asserting that CNNfn.com was profitable.

Time Inc. New Media sources said that with the Journal article, essentially Mr. Dobbs bullied his way into taking control of the business news portal–even if he has to nominally report to Mr. Pepe. What’s more, his shot across the bow exploited a larger feeling within the company that none of the on-line operations want to have their sites thrown under the leadership of a division as “historically fucked-up,” as one source put it, as Time Inc. New Media. That feeling stems from Time Inc.’s expensively produced Pathfinder Web site, which has drowned in the Internet infostream. “Whoever controls the portals controls Time Inc. New Media,” said one source in the division.

All of which leaves employees of Time Inc. New Media–who already “don’t know what’s going on here,” as one staff member put it–feeling even more rudderless. Some find it ironic that these on-line magazines, which were launched with much fanfare before they started losing so much money that the magazine groups didn’t want to have to record the losses on their books, would be so sought-after now. According to sources present at a divisionwide “town hall” meeting on April 16, Mr. Pepe retreated a bit. He said his goal was “engagement, not control” over the new “hubs”–most of which would not be run out of the magazine division.

Ed Adler, a spokesman for Time Warner, said that nothing had been announced yet about who would control the business news portal. Neither Mr. Dobbs nor Mr. Pepe were available for comment.

According to magazine publishing sources, BBC Worldwide, the American division of the British media company, is in “due diligence” to complete a deal with struggling plush magazine publisher Meigher Communications. The six-year-old, privately held Meigher publishes the prim, shiny life-style magazines Garden Design , Saveur and Quest .

According to published reports, and a source familiar with the situation, Meigher has been actively looking for an investor, or an outright buyer, to buoy the company for a while now. The need for investment became so acute in 1997 that the company cut back on marketing efforts, which caused Garden Design and Saveur to miss their rate bases once each in the first half of 1998.

Meigher’s magazines are respected in the industry; both Saveur and Garden Design were nominated for National Magazine Awards this year. But there has been a great deal of turnover on both the editorial and business sides since last fall. Notably, in mid-April, Garden Design editor Douglas Brenner left to become the deputy editor of Martha Stewart Living , and Quest president Julie Dannenberg left to start an on-line venture called Luxuryfinder.com.

Mr. Meigher didn’t seem fazed. “Turnover in this business happens. You get young people who get hired away,” he sniffed. As for changes at Garden Design , he said, “we are repositioning” the magazine in October. “Was there some friction there when we began to reposition? Possibly.”

Though circulation is up over all, newsstand sales have sunk. Garden Design ‘s single-copy sales dropped 22.8 percent in the last half of 1998; Saveur ‘s dipped 3 percent. Mr. Meigher chalked the weak numbers up to bad newsstand sales in the industry and a conversion of newsstand buyers to subscribers. He also said that given the small percentage of the magazines that are sold as single copies, he wasn’t concerned about the drop-off.

A spokesman for the BBC Worldwide wouldn’t talk about Meigher, but a source familiar with the situation confirmed that talks are “ongoing.” Mr. Meigher refused to comment, other than to say, “I think we are attractive to a number of publishers. This happens with some regularity.”

Hollywood business correspondent Kim Masters left her job at The Washington Post in something of a huff three years ago because Style section editor David Von Drehle, disapproved of her moonlighting as a contributing editor for Vanity Fair . Now that Mr. Von Drehle has left his editor’s chair at Style to cover the Presidential election for The Post , she may be coming back.

When Ms. Masters left The Post in 1996, Time magazine editor Walter Isaacson signed her up as a “contributor” and set up the contract so that she could write for Vanity Fair , so long as she filed those battle-of-the-moguls power dispatches that make media people salivate. Her arrangement allowed for her to write stories for Time when she wasn’t busy with Vanity Fair or writing her book about the Walt Disney Company. But according to someone familiar with Ms. Masters’ situation, the freewheeling reporter had some trouble adjusting to the bureaucratic way articles are edited into Time -speak.

When reached by Off the Record, Ms. Masters said that she was under contract with Time for several more months, but that she was “extremely happy” working for The Post before Mr. Von Drehle arrived, at which point she became “less so.” She confirmed that she’d been talking to The Post about possibly covering Hollywood for them again. But, she said, “I don’t know if there’s space for me, if it’s right for me. They have someone in L.A.” (Indeed, Sharon Waxman has been covering Hollywood for The Post since Ms. Masters left.) Still, Ms. Masters said, “In the right circumstances, I’d love to write for The Post .” Those circumstances would also involve her keeping her relationship with Vanity Fair .

Eugene Robinson, who took over as editor of the Style section in January, said that Post arts editor John Pancake had been talking to Ms. Masters and that she wouldn’t be horning in on Ms. Waxman’s beat. “I believe it would be great to have even more coverage from out there,” he said. Mr. Robinson said he had no problem with Ms. Masters writing for Vanity Fair , but he hadn’t yet met with Ms. Masters and the whole thing lacked “closure.”

Via e-mail, Mr. Isaacson said that as far as he was concerned, “we’re continuing our relationship with Kim Masters.”

After making concessions to management following the demise of New York Newsday in 1995 and then watching

as Long Island Newsday “achieved record high revenues and operating profits” for 1998, according to the Times Mirror Company’s annual report, members of the paper’s editorial union thought that they were in for a bigger payday.

According to a contract settlement that was ratified on April 20, Newsday ‘s editorial union members will receive an across-the-board 12 percent pay hike over the next three years. What that means is that reporters with five years’ experience at the paper will see their minimum salary rise from $65,239 to $73,069 by April 2002, making them the best-paid leg men and women in the New York area. (Currently, according to Newspaper Guild records, The New York Times pays its reporters $69,423 after two years on the job.)

So, what’s not to like? “In light of how well we’re doing,” groused one reporter, “it seems chintzy.”

According to Fred Bruning, vice president of the editorial unit of Local 406 of the Graphic Communications International Union, the union initially pressed for a 20 percent pay hike. “The company could have paid more, and the company should have paid more,” Mr. Bruning said.

What makes some reporters bristle is that even as Newsday chalks up record profits, its bigger cousin on the West Coast, the Los Angeles Times , which accounts for over a third of Times Mirror’s revenues, has been floundering. In first-quarter results for 1999, released April 20, Times Mirror reported that while Newsday posted “double-digit” profit growth, the Los Angeles Times lost money. The trouble in Los Angeles, some Newsday reporters contend, gives Newsday management an excuse to hold back on wages. “When they closed New York Newsday , they said they weren’t going to subsidize one paper with another, but now it seems that we’re the cash cow for Times Mirror. We’re subsidizing L.A.,” one reporter told Off the Record.

The new contract represents the first full bargaining agreement reached at Newsday under the gaze of Times Mirror chief executive and Los Angeles Times publisher Mark Willes, a.k.a. the Cereal Killer, known for his slash-and-burn methods when it comes to cutting costs. In two and a half months of negotiations, Mr. Bruning said, “The name Mark Willes did not come up, but his presence hovered over the table.”

Bob Keane, executive editor of editorial administration at Newsday, seemed to think the reporters and editors didn’t have much room to complain. “Nobody was burning up the lines from Los Angeles over the past few weeks,” he said, referring to Times Mirror’s involvement in the negotiations. “Our employees are among the best paid in journalism in America.”

–Gabriel Snyder

Of all the slavishly solemn coverage of the new Star Wars movie Off the Record detailed in last week’s column, the one that was left out–because the magazine wouldn’t confirm its existence–was Time ‘s April 26 cover story. The product of two years of negotiations with the filmmaker, it was probably the most faithful to George Lucas’ ego. In Time ‘s hands, The Phantom Menace becomes not a digitally rendered adolescent fantasy for little boys and sci-fi obsessives but a chance to trot out yet another unimpeachable, deep-thinking journalist, in this case Bill Moyers, to query the filmmaker about such heavy topics as “Is one religion as good as another?” At the end of the interview, which was taped for possible future broadcast on PBS, Mr. Lucas is allowed to intone, “Heroes come in all sizes, and you don’t have to be a giant hero. You can be a very small hero. It’s just as important to understand that accepting self-responsibility for the things you do, having good manners, caring about other people–these are heroic acts.” Or getting this kind of publicity.

Time has the expected collection of “exclusive” stills from the movie and, as part of a centerfold, a scientifically rigorous cut-away of the working parts of a light saber, complete with “cycling field energizers,” “energy modulation circuits” and a space for where the batteries go. In addition, Richard Corliss, Time ‘s movie critic, gives The Phantom Menace glowing remarks even though he’s only seen bits of the film. (To wit: “Even on paper, the film’s set pieces–a 10-minute Podrace and the climactic battle between the ragged forces of good and the minions of the dark side–have power and razzmatazz.”)

Time Los Angeles bureau chief Cathy Booth explained Mr. Moyers’ interview this way: “The whole idea was the way Star Wars has two different audiences–the ones who believe the mythology and the ones that don’t take it so seriously and just take it for what it is. So we took the package two ways.”